Michele Hansen update: Section 174 and bootstrapping with kids

Episode Transcript
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Justin Jackson (00:12):
Hello, and welcome to Build your SaaS. This
is the behind the scenes storyof building Web apps in 2023.
I'm Justin, and I've got MicheleHansen, Co founder of Geocodio,
back on the show today.Michelle's been fighting the
good fight With this rottensection 174 tax legislation in

(00:37):
the USA, how's it going,Michele?

Michele Hansen (00:40):
It's going. It's going.

What time right now, it's noon Pacific time for
me because I'm in North America.You are originally from the
States, but where where are youright now?

So I live in the Danish countryside now.

The Danish countryside.

It is 9:0:6 PM.

9:06pm, that's about the time when I'm thinking
how how old are your kids, bythe way?

We have one daughter, And she is 9.

9 years old. Okay. See, I always thought that
once they got a little bitolder, I would be, you know,
around, Like, 8, 9 o'clock usedto be just I was dead tired. And
that's, like, you know, whenthey're younger, story time,
bedtime, all that stuff. And Iwas just so exhausted.
I still get exhausted at 9 PM.Nothing's changed. So So you're

(01:31):
you're in you're making ithappen here, with the time
zones. And, Yeah. You've You'vegot an update for us, I think,
on section 174.
We've done a episode on thisalready. Folks can go back. Do
you wanna maybe briefly, again,describe what Section 174 is.
And then, yeah, just give us anupdate on what's happened since

(01:53):
the last time you're on theshow.

Yeah. So the TLDR is, in 2017, Congress
passed a bunch of tax cuts, Andone of the ways they sort of,
quote, unquote, paid for thesetax cuts according to the
congressional budget office,which Sort of does an estimate
of how much, any bill mightcost, was that they said

(02:16):
starting 5 years after the billwas was passed, Companies would
no longer be able to expensewhat is called research and
experimental, activities andinstead would have to amortize
them.

Mhmm. And

so I'm gonna unpack that jargon for a second.
Basically, research andexperimental is actually a huge
category of things thatbusinesses do. And for us, it
specifically calls out Softwaredevelopment as a research and
experimental activity. This isdifferent than research and
development, because theycouldn't make it easy for us.

(02:56):
And, you know, and there there'ssome r and d tax credits and
people can get that, but,unfortunately, that's a much
much much smaller group ofthings that qualify for that.

Mhmm.

So research and experimental is everything from
software development, to marketresearch. It's basically
Anything that goes into buildinga new product or making
improvements to an existing oneYeah. Is, I think the the
biggest the one of the biggestsurprises about this. And then,
normally, we used to be able toexpense all of that. Okay.

(03:27):
So your, you know, Your stagingserver, that's just an expense.
The developer who spends, let'ssay, a 100% of their time
building new products orimproving existing ones, That
used to be an expense. Now thathas to be spread out over at a
minimum of 5 years if that'shappening in the US or for
people who are working abroad,that's 15 years. So this has

(03:52):
created a huge problem for A lotof companies, but really most
acutely small software companieslike ours. Yeah.
Who normally just you know, ahuge percentage of our expenses
were things we could justexpense. And now instead, you
can only take a small percentageof them every year as an

(04:14):
expense, and then the rest ofthat is added to your profits,
and then you get taxed on on it.And so you end up getting taxed
on this profit that doesn'tactually exist because you
already spent that to run thebusiness. So it's a huge
problem. Congress never actuallyintended for this to take
effect.
I mentioned it was kind of asleight of hand to pay for the
tax cuts. Yeah. The plan Allalong was for them to repeal

(04:36):
this before it took effectbecause they knew it wasn't good
tax policy. And so despiteDespite the fact that they know
it isn't good tax policy andthey tended to repeal it before
it took effect, they didn'trepeal it before it took effect
because congress. And so nowwe're all in this situation

(04:57):
where we're we're in this sortof, difficult situation because
Of

this really?

Unintentional tax policy. And so, I mean,
people have seen their taxes goup, like, 400%. Like, it's it's
people are talking aboutShutting down their businesses,
freezing hiring, laying peopleoff. It's it's serious out
there.

Mhmm. It's a real thing. And so, you put
together the s s b alliance,small software business
alliance.org. And, you've beendoing some work behind the
scenes. Can you give us anupdate on, yeah, what's
happened, since We you you hadthe last time we talked, it was,

(05:40):
like, April 14th was your date,because that was, what what was
happening around that time, andwhat's happened Since then.

Tax day. What was happening around that time?

Day. Of course.

So yes. And so the reason why you heard from me
last time was because, We'resending a letter to congress
from small software businesses,about these section 174 changes
and Describing the impact theyhave had on businesses like
ours.

Mhmm.

And so we sent that letter on tax day, which
was April 18th this year, to theleadership of both the house and
senate, the senate financecommittee, the ways and means
committee, and also the leadersof the small business
committees. Yep. And, so we had500 And 97 small software

(06:33):
businesses from all 50 statesplus DC signed this letter,
which I am Awesome. Hugelyproud. Like, I just, like, beam
with pride, thinking about howwe came together to do this.
And, You know, let like,coalition letters like this,
they're not the kind of thingthat really makes the news

Mhmm.

But they're an important step in the
legislative process, forcompanies who normally, like us,
don't have any political poweror any involvement, really,
Mhmm. To come together and say,hey. This is an issue. Here's
how it's impacting us. By theway, it's impacting every state.

(07:16):
Yeah. And not only to send it tothose legislators, Then to have
the people who signed the letterand even people who didn't sign
the letter to send it to theircongresspeople saying, this is
happening. We're in yourdistrict. We're in your state.
We're impacted by this.
Please see below for the letter.But, also, legislators who, you

(07:36):
know, who who support this, whoare, you know, already
cosponsored of the bills, Theycan go to their colleagues and
say, hey. This is an issue. Likelike, here's an example. Here's
a letter from small softwarebusinesses.
Here's a letter from small manmanufacturers. Here's a letter
from small biotech companies.Right? And so this is sort of
part of that docket, that theycan use, in their negotiations

(07:58):
to encourage other legislatorsto support this and understand
that this is an urgent issue.

Yeah. And and kudos for you for galvanizing
all of the support because thethe story that I saw play out
was somebody in Twitter, Sorry.Somebody on Twitter or in a
Slack group or something wouldwake up to this. They would
learn about it somehow, and theygo, oh my gosh. How come
nobody's talking about this?
And I could say, oh, people aretalking about this. There's

(08:26):
already a movement underway.Don't start another change.org
thing. Just go to SSB Alliancedotorg and sign up there, and
then we could galvanize all thesupport in one place. So well
done.
I think for you to get ahead ofthis and then to create the, the
container for people to like,When they did wake up and

(08:49):
realized it was a big deal forthe it gave us a place to go and
then put our efforts all kind ofin one spot. And I'm guessing
that there's gonna be more andmore people kinda waking up to
this still, and they're gonna belooking for Where do I go? Well,
you can still go to s s balliance.org, put your name and
email in, and then get updateson what's happening.

Yes. And and Sorry. Even people who didn't
sign the letter, it's stillincredibly impactful if you
contact your congresspeople, soyour representative and your
senators, about this, you know,if you run a small business,
include a couple of lines aboutabout how it's impacting you and
include a letter of the copybecause we wanna make that a

(09:33):
copy of this letter gets toevery single legislator because
it is having an impact. I heardfrom contacts in DC this week
That emphasizing the impact ofthis on small businesses is a
salient message both forRepublicans and Democrats and
for Independents, and officesare hearing from small business

(09:54):
owners in their states anddistricts who are caught off
guard by this, and that ismaking an impact. People are
having really good productivemeetings, with their with their
legislators on this.
I've heard from people who've,You know, they used the contact
form. They ended up having, aphone call or even a meeting
with their senators. The guysfrom Divergent Labs, they met

(10:16):
with Their representative andsaid that, you know, they they
were very receptive to it andand and that that going with the
letter in hand really gave thema A level of, of sort of of
legitimacy Yeah. That they mightnot have otherwise had Going in
just as or felt like they hadgoing in as small business

(10:38):
owners themselves. So even ifyou didn't get a chance to sign
the letter Before, tax day, youcan still get involved.
You know, we actively need morepeople reaching out as well
because just as of today, Thereare now 30 cosponsors on the
senate bill to fix this. Andlast congress, when there was

(10:58):
also a bill, there was 36, sothere's still Another 6, we need
to get to at a minimum. 30 isnot a 100. So we need to make
sure this is getting in front ofevery senator and every
representative, and that theyunderstand that small
businesses, are impacted bythis. And so on the SSB Alliance
website.

(11:18):
I actually have templates andlinks for contacting Congress.
So there's a tool you can go to.It you know, you put in your ZIP
code. It gives you a link totheir contact form, And then
there's a template for, youknow, describing the impact and
including the letter, like andall of that, honestly, should
take you Less than 10 minutes todo. Yeah.
And and it and it really isimpactful because their staff

(11:40):
have to keep tallies on everysingle contact about specific
bills. And so, and and the keything there is that is that you
have to customize it a littlebit. So if you simply just send
them a copy of the letter,Everybody who just sends, say, a
copy of the same letter, thatgets counted as 1. But if
they're they're unique, they getcounted as separate contacts

(12:02):
about this, And that issomething that offices really
pay attention to.

Yeah. This is great. I'm just looking at your
you've got, yeah, letter tocongress as a PDF and then
Contact, congress, and then youcan go to congress.gov and
search for your congress membersif you're in the US. If folks
follow those instructions andthen customize the letter a
little bit, that even that thatcreates more Momentum that that

(12:31):
that has a bigger impact thanthem just copying the same thing
over and over again.

Yes. Exactly. And, unfortunately, this is
something that only, US citizensand permanent residents can do.
I recognize that there are a tonof people who have US LLCs, USC
Corps, who are impacted by thisbut don't live in the US Yeah.

(12:55):
Aren't US citizens.
Unfortunately, there there isn'ta whole lot, that you that that,
you know, folks in yourposition, quite frankly, can do,
but Raising awareness about thisand encouraging all of the US
founders you do know, regardlessof whether they're in the
country or not, because UScitizens have the right to vote
regardless of what where we livein the world, which not all

(13:16):
countries have. Using whateverplatform and network and and
connections you have toencourage, the US citizen or
resident founders, you know, tocontact Congress. That is Hugely
impactful.

Yeah. Yeah. And then talk about it on Twitter. I
was just, yeah, looking at thisone from the Emergent Labs, and
them Talking about it on Twittercreates more momentum. So if you
share your experience and, yeah,they felt empowered bringing
that printed letter that you hadand all the people who signed it
when they went and, met withtheir their house

(13:53):
representatives.
Do something about it, Then talkabout it, and we gotta keep this
thing going.

Create social proof.

Yeah. And and and so what's what's happening
next? What are what are the nextSteps in this. What what are is
there other dates we need to bethinking about? Is there are we
just waiting for it to hit acritical mass?
What are the other things to beconsidering?

So Right now, you know, as as far as sort of
my read on the politicalsituation, which is to say, you
know, what I'm reading andreading between the lines, in,
you know, political and whatnotis DC is focused on the debt
limit right now, like the USfederal government's, spending
level. And that is proving to bejust a tad contentious. There's

(14:38):
a there's different ways thatcould shake out. It could be
that they just try to just dothe debt limit alone and just
only do only pass a bill thatdoes that and then leave
everything else to the side.Mhmm.
Or there could be some sort ofcompromise package in there, as
part of the debt limit, but thatis sort of the Soonest
opportunity for anything tohappen because not every, like,

(15:01):
piece of legislation has a has atax section in it. That is
possible, but not likely. Andthat I I believe that has to be
sorted out before they go onrecess in August. Okay. Now it's
Also possible there, you know,that that we go into recession
and this sort of, you know,bubbling, You know, mini bank

(15:23):
crisis turns into a bigger bankcrisis, and there needs to be
some sort of economic recoverybill.
It could go in there, but, youknow, I mean, predicting
recessions, I mean, that's notmy department. So Yeah. The
House Republicans are alsoexpected to release a budget or
or sorry, an economic packagebill that will include this. But

(15:44):
from what I have Been readingthat's not really considered a
sort of a serious proposal.That's that's Okay.
It's it's the yeah. They'regonna that's sort of their wish
list of everything, but notreally, something is gonna
happen. There's been a lot oftalk basically about the
negotiating side of this. Sobecause this was part of paying
for those tax cuts, Which wereRepublican led effort, there is

(16:07):
a sense among Democrats thatRepublicans need to give them
something in order to for themto give them this thing.

Mhmm. Our

role in this is be like, hey, guys. That's
that's great. You you've gotthese, like, feuds you wanna
settle. This is an urgentproblem for businesses that are
gonna go out because this? So,like, can we try to put that
aside?

Yeah.

Now but I actually was reading something
earlier this week saying, youknow, that, you know, there's
there's talk about child taxCredit or low income housing
and, you know, actually orwhether that trade is expensive
enough. I mean, it's a wholekind of thing. As it looks like
right now, basically, thesoonest opportunity for this to
get fixed is at the end ofSeptember. There's a continuing

(16:46):
resolution at the end ofSeptember where Tax,
historically, has been part ofit from my understanding. And so
Yeah.
That from what I'm reading, thatlooks like the soonest
opportunity. What that means isIf you, actually, like us,
extended your filing toSeptember 15th, this is highly
unlikely to be solved beforeSeptember 15th.

Yeah.

Because that is you that is September 30th. So
it is highly unlikely this isgoing to be solved by then. We
still don't know if the IRS isgoing to actually have the
regulations out yet that thatdefine what software development
versus maintenance versus all ofthese things are. I know they're
working on it from what I'veread. No idea when that's coming

(17:28):
out.
If it doesn't happen inSeptember, unfortunately, it
would be at the end of the year.

I'm assuming if the IRS hasn't released guidance
yet, it would it would be hardto know for your accountant to
know what guidance to follow.Right? Like, how how this
actually how this will actuallybe taxed or amortized. And so is
that kind of for smallbusinesses that are, You know,
they're doing the advocacy work.They're contacting their

(17:53):
congressperson, all that stuff.
On the accounting side, untilthere's guidance, I'm guessing
that, Like, is it is it just awaiting game?

Well, from my understanding, and what you
know, if you look at, like, thethe filings of public companies,
They are proceeding under theassumption that the definition
will be that it is new featuredevelopment and new improvements
on existing products, but notsort of straight maintenance.

Yeah.

VMware, for example, they talk about in the
in their hot filings going back,over a year, a lot of companies
talked about on their earningscalls. And so most of us don't
have the expensive accountantsthat they have. Yeah. Most of
us, you know, also useaccountants who are also small
businesses themselves.

Yeah.

But that is the guidance, that they are
proceeding under. And so therethere was partial guidance
issued at the beginning of thisyear, basically, warning
accountants, not to wait it outand just file as if nothing had
changed. So accountants havealready been put on literally on
notice about this, But, yeah, wewe will have to see how it

(19:02):
shakes out. I mean, I do knowsome people who said, well,
maybe we're just gonna pay it asif it was the same as last year
because our accountant Told usthat DC is gonna figure this out
and we're just gonna trust thatit's gonna happen. And then what
their what their gamble isbasically that is if it isn't
fixed, Then they're gonna end uppaying they're still gonna owe
400% more in taxes, and thenthey're gonna go, owe penalties

(19:26):
and interest on top of that.
Mhmm. And so for some peoplethat, you know, noncompliance is
ostensibly always an option.Right? Yeah. That's, You know,
that that that's up to them andtheir accountant.
But I think it's also important,I think, as you've you've
mentioned when you did yourfirst mention of this on the
podcast, To not fall fall intomagical thinking that, our

(19:50):
community loves to fall intothat, oh

Yeah.

You know, sales tax, that doesn't apply to us.
GDPR, that doesn't apply to us.Like, it does. It does. That
that's part of building ASAS iscomplying with government
regulations, even when they areunclear.

Yeah. This is wild. Yeah. It's just every time
we talk about it, it just feelslike this is just, so
unnecessary, but really here. Isthere anything else that you
want folks to know about rightnow at this stage other than
that reminder to Go tossballiance.org, contact

(20:31):
Congress, get the letter,customize it, Send it.
Anything else folks should beknowing about?

Send the letter if you haven't done so already.
That is the most important thingto do right now.

Okay.

It doesn't matter if you didn't sign the
letter originally. That's fine.You can simply say I'm I'm a
small business and, you know,Like, I support this letter that
was sent. Right? I'll give you alink to include in the show
notes, but that is the mostimpactful thing that you can do.
And everything I have justtalked about, if you were not
aware of this, probably soundsan awful combination of scary

(21:07):
and confusing. There is aneffort going on to try to fix
this. What is in your control isto send a letter to Congress To
tell the other founders, youknow, to send the letter to
congress, just send them thelink, use the templates. You
don't have to think about it toomuch, but it really does make an
impact. Like, the the letter wasmentioned in a, house small

(21:29):
business committee hearing.
It was officially entered intothe congressional record. It's
Getting it's getting mentionedin other hearings and whatnot.
It's it's these sort of smallprocedural things that that
don't make the news, but theyactually really make a
difference. And so So the morelegislators are receiving this
letter, the more who arereceiving it continually.

Mhmm.

That Has an impact in the sort of, you know,
how the sausage gets made kindof a way Yeah. That that usually
Is it isn't quite so public?

Alright, folks. So, yeah, make sure you do that.
The link will be in the shownotes, but it's also
atssballiance.org. And then youclick the contact congress link
at the top, and it'll take youMichelle's got it really nicely
laid out here. Thanks for doing

all this work. And Tailwind.

Yeah. You you're in Tailwind. That's perfect.

This is and GitHub Desktop. Yeah.

That's good. It's it's awesome. I I think

also larval vapor too. Yeah. We got we got
the whole the whole gang.

You you got the whole stack Behind you. That's
great. I if you have time, I'dI'd love to get your thoughts on
I just had Erin Francis on, andwe were talking about
bootstrapping and, starting afamily or bootstrapping while
you have young kids and lifebalance and everything. And, we

(22:56):
had done an interview, about thestory of You and Matthias
building Geocodio, which is yourcompany. You're you don't do tax
policy for a living.
That's just a hobby.

God, no. No. After between this and having
gone just gone through sales taxcompliance, I don't ever wanna
talk about taxes again in mylife. I will have to, but I am
Extremely done with the topic.

It'd be I'd be curious because I I know one of
my memories of Speaking to youwas, you had this line of when
you'd started Geocodio, you werelike, if this could pay for,
diapers, I think it was, orchildcare, or, like, Each win
you had, there was, like, thisrelated milestone that related
to family life. And I'mwondering what your perspective

(23:46):
is on some of that. So yeah.What what do you think when you
advise people, friends, who arethinking about starting, SaaS,
and they also have young kids.What what kinds of things are
you saying to them?

Whew. I mean, it's, you know, it's tough. I
should say that I have notlistened to the episode with
Erin yet, but it is queued up,because I think I think it
sparked a good Conversationabout this, you know, I've
noticed conversation you andAaron and and Matt Wencing has
been jumping in on that, and Iguess it's a good one to have.
Right? You know, because, yeah,when we started to do Codeo, the

(24:23):
the original idea was the thingthat sort of, you know, Got us
off the couch because we wouldjust yeah.
We spent our weekends catchingup on Game of Thrones or
whatever. Mhmm. Right? And then,you know, no kids. Like, just
the world.
You know, the weekends were ouroyster. Right?

Yeah.

And then, you know, kind of things got real
when we truly understood, youknow, how much the cost of
daycare would be, which Forcontext, in the US, in in a
majority of states, is moreexpensive than state college
tuition.

Mhmm.

And so where we lived In a major city, it was
$25,000 a year for infant daycare.

Wow.

And at the time, I'm you know, we both had, You
know, good professional jobs,you know, working in web
development, but that was a lotof money. And we're like, okay.
So we can either kill it at workand try to get raises of $25,000
this year. Mhmm. Or we can startsomething on our own, and so we

(25:23):
can just keep the same level ofliving.
And so that was sort of theinitial goal was to to try to
pay for that. I didn't eventhink about going full time on
it for a long time because itwas like, okay. Well, now we're
at least making the same amountof money if you're taking, you
know, day care into account. Andit was like, oh, well, okay.
Maybe, you know, we got to, fixour broken air conditioner, you

(25:46):
know, that was $8,000 withouthaving to take out a loan.
That is amazing. Mhmm. Or I gotto pay off my student loans.
Like, it wasn't Yeah. It was itwas very focused on things that
kind of made our family budgetbetter.

Initially so you you were working as a product
Manager, I believe, or somethinglike that?

Yeah. Yeah. So I started out as as, like I I
actually transitioned from beinga Technical project manager,
like, at an at an agencymanaging web development builds,
to then being a product manager.

Okay. And, and Matthias was, was he working
he's a w2 as well?

Yeah. Yes. We were both w2.

So you're both w2. You have a baby In in in
that time. And then, you folksmade the decision. You're both
gonna keep continue working fulltime, but That means daycare.
And daycare is $25,000 a year.
And then you're like, okay. Howwe gotta figure out how we can
do this. One option is we couldtry to get raises. Another

(26:46):
option is we could try to buildsomething on the side. Did you
try a few things to build on theside?
Like, how long did it take?

Yeah. We did try a few things. You know, most of
them didn't didn't work. Yeah. Iremember I remember going to a
hackathon, like, I don't know, 6or 7 months pregnant.

Okay.

Trying to wear baggy clothing so I didn't look
pregnant, which makes meincredibly sad to think that was
only 10 years ago, and that wasjust I like, it was

What? Sorry. Sorry. You you were you were
trying to not look pregnant justbecause you didn't want the
What? Sorry.
Explain that part

for me. Lose legitimacy to the judges and
investors present.

Got it.

Because it was also like it was, you know, it
was a 24 hour all night, like,pizza and beer at 2 AM kind of
it was a I mean, it Yes. Thisthis sounds like very 2012 when
I say it. But it's I don't evenknow if these kinds of things
still happen anymore because itseems like as a community, we've
kind of Moved beyond that andnow recognize it's, like, really

(27:48):
terrible for work life balance.But, you know, like, that was,
like, That was what we did backthen, I guess. Yeah.
And no one told me that it wouldbe bad to be pitching pregnant,
but that was just something Ihad Internalized?

Yeah. I mean, and if you think about the
everything else kind ofassociated with that event, like
pizza and beer and stay up allnight is not exactly welcoming
To to, you know, to, well, to anexpectant parent, a new parent,
or, You know, you can keep goingdown the list.

People who need sleep. Right? Yeah. I mean, it's
I think there there's a lot ofdownsides of that. But, yeah, we
we built an app For that thing,that didn't go anywhere.
Built, I don't know, a couple ofother things that maybe one
other thing before that. Then webuilt this mobile app, that
actually ended up gettingsomewhere in the range of, like,
3, $400 a month in ad revenue

Mhmm.

Which was amazing. And then we want
something else after that, andthat one, like, Totally failed.
And so but then by that point,we kind of had that one going,
but then we actually neededgeocoding for it. And I've told
this story a 1000000 times.Anyway, so Geocodio comes sort
of out of that app, actually, inorder to keep that running.
Because then it was like, oh,okay. This is making, like, 3 or

(29:00):
$400 a month. Like, this isamazing.

Mhmm.

Let's just keep this going. Like, let's just
ride this gravy train as long aswe can.

Yes.

And intentionally, actually, not
spending too much time ongeocodio, at the beginning. And
then it completely blew, awayour expectations. I remember my
I remember I had this, like,spreadsheet that I can't find,
but I remember making it of whatour definitions of success were.

Mhmm.

And a wild success was We earn more than
our server costs, which were $20a month. So yeah. And all of
that is happening. Meanwhile,you know, I think when Geocodio
launched, our our daughter was,Yeah. She would have just turned

(29:45):
4 months old.
Like, we incorporated a weekafter she was born.

Wow. So so you got some of that started before
before she was born. You youwere, like, ramping up and you
were like, okay. We're gonnabuild some of this. And then she
was born.
And then the what was was theapp launched after she was born
or before she was born?

So the the the app that had the ad revenue,
that was launched, I think,October of 2013. So she was
about 2 months old at thatpoint. And then at that point,
we so, you know, our eveninghours, you know, At least, you
know, thankfully, babies kind ofgo to bed to sleep early. So,
like Yeah. You know, come 7,7:30, we could actually work on

(30:27):
it for a couple of hours a day.
And we probably should have beensleeping because she would, you
know, wake up at 1 or 2 AM, but,so it is. And started working on
Geocodio more. There's a greatpicture of Matthias actually
going down to, this, like,incubator co working space While
while he was on paternity leave,I think, with her in the, like,

(30:50):
you know, in the car seatcarrying her in, like like,
Geocodio, like, very Preliminaryversion of Geocodio is running
on a laptop. He's testing itwith his friends, and she's
just, like, sitting therehanging out, you know, in the
car seat.

That is an interesting perspective is that,
talking about balance, I mean,this really depends on a lot of
factors like post Maternal care,how well you're sleeping, if
there's any health complicationsfor for mom and baby. You know,

(31:22):
there's all these other factors.But if baby is healthy and
sleeping, those first and ifyou're on parental leave, that
Could actually give some spaceto work on things because you
newborns often do sleep and youcan put them in a seat and they
just kinda Hangout. Was was thatyour experience? How hard was
managing all of that, and wouldyou recommend it to others?

Yeah. I think this is one of those times where
it's like, this is what I did.And if I was doing it again, I
don't know if I would do it thesame way, and I don't know if I
would recommend someone else doit either. As you said, it's
very contingent upon personalfactors, Like, my own recovery
was actually quite rocky. So,but, like, you know, Matthias

(32:10):
was able to, you know, Put herin the Moby wrap, which is like
a wrap that you sort of yeah.
You wrap around you and it holdsthe baby to your chest very
tightly and, like, they love itand will sleep She would sleep
for hours in that, and so hewould just have the wrap on and
be coding, like, with his armskind of outside and, you know,
it worked. I think he was highlydependent on on situation, but I

(32:30):
knew actually, I do know otherpeople who launched something on
maternity leave. Do you knowAnna Mast? Yeah. She yeah.
So she, I believe, launched Herbusiness that the she then ended
up, she sold out, I think, lastyear or the year before, she
launched that while she was onmaternity

Yeah.

And so I I think, you know, for me, it's
not just about the parentalleave aspect. It's that I found
the early stages of parenting,to be just really exhausting and
depleting and the lack of sleepAnd the kind of, you know,
you're you're you're just oncall 247 and have no social life

(33:12):
and, you know, If you are goingto work, that's your only adult
interaction of the day. There'snot really a whole lot of
sources of dopamine unlessyou're someone who just
absolutely, Like, loveschildrearing, which

Yeah.

I mean, on it, like, I I I have a lot of other
interests in life. And so, like,For me, it was actually quite
motivating to be like, okay. Ionly have 1 hour a day

Yeah.

To work on whatever I wanna work on. And
so, like, I would think aboutthat all day. And then when I
actually got time to do it, Iwould sit down, and I was very
motivated. And maybe this isbecause I have ADHD, and, like,
I need a deadline, and I like,things have to be a crisis.
Right?
Yeah. And so but Matthiasdoesn't have ADHD, and he also I
kinda felt the same way that itwas actually really good

(33:57):
because, otherwise, it was like,we don't have to work on the app
now. Like, what you know, timejust kind of without kids, like,
I felt like time just kind ofstretched in front of me
forever. And Yeah. It was so,procrastinating was so much
easier for me versus when kindof, you know, family life comes
into play.

(34:18):
You don't have control orinfluence even over your own
schedule in many cases. And sothose rare times you do have
Mhmm. For me, I got a lot ofdopamine out of working on our
projects. For other people,they, you know, they might use
that time differently, and Ithink that's equally valuable. I
probably Shouldn't have beenworking all the time.

(34:41):
I was probably a workaholic formany years there.

Mhmm.

It's not really healthy to have, like, work, I
think B is such a core source ofdopamine, but that's only
something I have, you know,learned in the past 4 or 5
years.

Yeah. Well, the the struggle I have is and and
now I'm hearing it in your storyas well. Even hearing you You
tell that story. I'm like, I reit it's bringing up old feelings
for me. Like, yeah.
I remember how motivating thatwas to feel like I have this
baby. Now we have this child andit's us. Like, we're responsible

(35:21):
for this child. And how are wegonna do this? And Such a big
portion of that ends up beingmoney.
Like, we're gonna need money forall these things. And it's It
was motivating to feel like,okay. Well, what can we do? You
know? What can I start on theside?
What can I do on the side? And,I I feel that. I feel like okay.

(35:45):
And and it does feel like, youknow, there there's probably, a
relatively healthy way to dothat. And but there's also this
part of me now that I can see itcan go both ways.
Like, It happens to have playedout for you and I, meaning,
we're the survivors in thesurvivorship bias. Right? But I

(36:07):
have also talked to lots ofpeople who really kind of
destroyed themselves, Pushingthemselves to be like, I'm gonna
start a bit I'm a new parent,and now I'm gonna start a
business. And, for them, Itended up being the wrong
decision and which leaves me inthis awkward place of, In

(36:30):
retrospect, just hit the sameway you were saying, I don't
know if I would necessarilyadvise people to do that. It's
difficult to know what advice togive to folks.
Because On one hand, it workedout, for us. It seems like it
would be terrible to robsomebody of that opportunity.
But on the other hand, I justfeel like business is a real

(36:52):
crapshoot. Like, it just it itit can't happen for the majority
of people who try it. It it'sgonna be like if you get a
person who doesn't have kids andthey have every you know,
they've got lots of financialmargin and lots of time margin
and lots of energy margin, Evenfor them, the chances of success
are low.
And then you add in this ideaof, like, you're also going to

(37:14):
be, You know, in the top, Idon't know, top 1% of parents
who can have the energy to dothis and be a good parent, and
you're gonna be in the top 1% ofcouples who can, manage the
emotional stuff of being newparents And still have a
relationship, and you're gonnabe in the you know, there's all

(37:35):
these other factors. Do youthink there's any Guardrails or
advice we could give to folkswho are considering it? Like,
what are the considerations ifyou have A new child and you're
thinking, okay. Well, I gotta dosomething. When should you
pursue that dream and whenshould you not?

(37:57):
And is there any sort of wisdomthat can come from the folks who
have gone through it to say,well, here's the things to
consider. Here's when, You know,maybe I would pull the plug or
here's where the guardrailswould be, I guess. Do you have
any thoughts on that?

It's a it's a tough question. Right? Because,
you know, the both of us We'rewe're only speaking from our
personal experience. You know,this isn't something that we
have studied. This isn'tsomething that we have, I don't
know, applied, right, in in, Youknow, 100 of companies, and we
can say, okay.
Here are the things that workedin here. Like like, we don't
have any sort of, like,empirical evidence. We we just
have our own experiences, andand that makes me not wanna give

(38:34):
any advice, on the topic becausebecause I I only have my
personal experience. You know, Iremember when this this would be
so interesting to listen backto. I remember when we were
talking a couple years ago, andI don't even know when that was,
but it was before COVID.
So this is a while ago. Mean,that that was, like, what, like,
at least a decade ago. And Iremember we were talking about

(38:56):
this, and you asked me, you knowYou know, about this, like,
family balance and whatnot. Andyou said, well, so what about
somebody who has a w two job?You know, they're a developer.
They come home. They eat dinnerwith their family, and then They
go into the basement to work onthe side projects right after
dinner. They're doing it fortheir family. They have a
financial need for it. Right?
Necessity breeds invention. AndI and and I remember thinking,

(39:19):
like, very clearly, like, no.They can't like, they shouldn't
do that. Right? Because, like,their spouse, you know, who I
think in your scenario, like,was a stay at home house.
Right? Like Mhmm. They areclearly putting work in all of
its forms, whether it's sort ofself directed or Employer
directed, like, above family andabove their relationship with

(39:39):
their spouse and and sort of,like, social interaction and
support like that. Right?

Mhmm.

And so and I think this is where I think,
like, Matt Wencing, you know,tweeted this the other day of,
like, you know, you have 4buckets. Right? You have family.
You have social. You have Whatwhat were the other ones?
Like, health Hobbies. And oh,yeah. Hobbies and and and
business.

Startup. Startup.

Right? And in order for the start to be
successful, you be putting 9 atleast 9 of your 20 tokens in
that bucket.

Mhmm.

And

and Jason Cohen, he even separates out Kids and
spouse. So he says you can do 2things 2 big things well. And
And then he lists everything.But he separate he puts family
into 2 buckets. Spousalrelationship and then just being
a parent and Child rearing.

(40:26):
So, yeah, there's all sorts ofways to separate it out.

But yeah. And and so there's kind of this
conversation going on about it,and And I thought that was a
really interesting way oflooking at that that like, I
remember, you know, I had to dothis an activity like that at
founder summit a couple yearsago of And from a burners
perspective, right, is that youcan't be running on full steam
in every area of your life.Like, something is going to

(40:52):
suffer. Mhmm. And I guess I wishI had known about that concept
and way of framing it beforehandbecause I think that would have
given me some perspectiveEarlier that it took me years to
get, and I'm still in theprocess of attempting to apply.
And, like, you can't doeverything a 100%, and it's

(41:17):
worth it to kind of sit down andsort of audit where you're
spending your time and Whetherthose are the things that are
most valuable in the long term.Like, I I actually, I saw
something on Well, it was onTwitter, but it was from Reddit
the other day about, you know,the only person who is going to
remember in 20 years that youworked late is your kids.

Mhmm.

And I was like, oh, oh, that hurts. Especially,
like, as somebody who has to doa lot of late night Calls
because of time zones and, youknow, like, did an evening MBA
program, like, as a parent and,like, you know, was working at
night. You know? Like Like, thatreally that like, that's, like,
still that's, like, still justhitting and sort of, living, you

(42:04):
know, rent free in my heartright now. But then it's a
question of, like, well, but ifI'm working what if I'm doing
that work for my own business,for something that's building an
asset, You know, for our family.
Right? Like, doing that likelike, I think I look back on
those early years and, like, youknow, the times I regret
working, they're, you know, whenThat that they're regretting

(42:28):
doing w two work on the weekendwhen it didn't really matter.

Mhmm.

Right? Like, And I wasn't really getting all that
much out of it. Right? Versus,like, opening my laptop at 9 PM
when she's already asleep andI'm building it my spouse and we
genuinely enjoy workingtogether, I don't I don't I
think that's very positive.

Yeah.

And so it Really, really depends on the
situation, but, like, I thinktalking about being, like, you
know, some somebody was saying,you know, they wish they had
been more present. Right? AndI'm like Mhmm. I look back and,
yeah, I wish I had been lessdistracted by nighttime and
weekend Slack drama from my wtwos. Mhmm.
Because that distracted me. Likelike, just corporate drama,

(43:13):
like, was very, verydistracting. Like Yeah. But
there was never really a timewhen, like, You know, for me, I
guess, that, like sure. Therewere times when we were talking
about Geocodio, like, at dinnertime or whatnot, but, like, I
don't know.
I hope she absorbed Somethingfrom that. Right? You know?
Yeah. So, like, it wasn't likeyeah.
Those those are the workrelated, but I I didn't have

(43:34):
very good boundaries at thetime. And so I guess it kind of
all It kind of all blurred, andit took me some years to really
separate those things. Yeah.

Yeah.

And that's a journey that I can't I don't I
don't know how to I don't know.I wouldn't wish it on anybody,
and I also don't know how togive you advice on here's how
you, you know, expedite your ownjourney through workaholism and
recovering from it. Like, don'tknow how to give advice on that.

Yeah. Well and and this is the thing. Right? Is
the in some ways, I do have someempirical evidence Because I
have this inbox that I've hadsince 2012 when I started
podcasting and blogging filledwith people's journeys.

Oh, you've got the mega maker people.

And I've got the mega maker community and podcast
listeners, and and I have Youknow, I started off with this
kind of very this this so, youknow, maybe some bravado of,
like, this is what folks need todo. The best life you could ever
attain is, you know, startingyour own independent business.

(44:33):
And Now I've I have these reallife case studies of folks. And,
again, there's this realizationthat it just the there is a risk
In all of this, and the gaugesare, you know, the gauges for
your life are sometimes hard toself assess. Nobody else well,

(44:57):
not nobody else.
But, Often we don't get themassessed by some outside
professional. And theEverybody's experience is
different. The context isdifferent, etcetera. And so I on
one hand, I wanna Encouragefolks and say, well, look, like,

(45:17):
it really has starting thisbusiness has had a tremendous
Positive impact on my family.There's no doubt about it.
But I wanna have some somecaveat caveat to that to say so
on one hand, I wanna encouragepeople that are doing it. Go,
Yeah. Like, go after it. But onthe other hand, I wanna say You

(45:39):
you do need something. You needsome guardrails and because the
the again, this is where magicalthinking can get us in trouble.
This thought of like, well, Icould never get divorced, or I
could never become, you know,alienate my children, or I could
never Cause us financial ruin.Well, you could. Those are all

(46:02):
possibilities. Like, those areall things that could happen
that We need to take aresponsibility for in the same
way we take responsibility forGDPR and sales tax compliance
and all these other things. So,yeah, it's a it's a tricky I'm
glad that the conversation ishappening because I think a a
binary Answer of just like, rahrah, go for it isn't enough.

(46:29):
It doesn't cover enough of thematerial. And My hope, I guess,
is that a deeper nuanceddiscussion Where we kind of
consider some of these thingsand say, well, this is what it
cost, and these were the risks.And And I'm speaking as someone

(46:51):
who made it through, but noteveryone makes it through. So
those are things to consider.And, ultimately, What your kids
really need are love and careand, presence.
You know? And, not presence.

With a c, not with a t.

Yeah. Not guess.

Though if you ask them, they would say they
definitely need presents with at.

Did you Did you see Venny's tweet? This is a
side, but Venny Venny, who runsDiversified Tech, she had this
ossitory tweet where She her herchild go goes to her and goes,
mom, I'm scared of dying. Andher mom goes, oh, Vinnie goes,
what? Oh, dear. Why are youscared of dying?
Well, that means I won't haveany more screen time.

Oh, dear. Yeah. There's

a priority right there.

There's a real conflict here. Right? Like, a
very, very strong Two sidespulling, with force at one
another conflict. And I thinkalso within us about this.
Right?
Because On the one hand, it'slike, wow. This has been life
changing for my family, for mepersonally, for for my

(48:06):
professional satisfaction, like,For the kinds of opportunities
that that that my family canhave, feeling enormously
grateful and lucky to be in thisposition And feeling and going
beyond that to feeling aresponsibility to help others
recognize that is an option theyhave available to them

Mhmm.

And to help them pursue that and achieve that if
they want that. Right? Like,there is just this kind of and
And I see this in you as wellthat it's like this sort of,
this the the this compulsionThat if if one has been
fortunate in their life thatthey have a an obligation to

(48:51):
help other people recognizethat, like, to like, in their
own lives as well. Right? Like,there's a responsibility
Totally.
Yeah. Duty. Right? It's not anoption. But then at the same
time, also realizing that it'snot for everybody, and there are
people who are very happy toeven just having a stable 9 to 5

(49:17):
job for 40 years is a dream cometrue for them, and they want
that.
And they genuinely genuinelywant that or that, You know,
their situation in life has notset them up in the way to be
able to succeed on their ownentrepreneurially. Mhmm. Or What
you know, so whatever theircontext is, right, that it's

(49:37):
like, people want differentthings in life. Mhmm. And that's
okay.
And there might Be somebody who,you know, in my situation says,
okay. Well, daycare is gonna be$25,000 a year, and I'm, you
know, I'm gonna try to kill itat work between the hours of 9
and 5.

Mhmm.

And if I make an extra $25,000 a year, that's
great. And if I don't, you knowwhat? We'll we'll cut back, and
we'll do free activities

and

don't have to take plane trips. You know?
Right? Like, we'll We'll make itwork because love is free, and
it doesn't matter. And, like,there's and that's true as well.
Like, that like like,everybody's experience is true.
And their context is matters andno single human being, no single
family has The same context asanother family. And so I I feel

(50:29):
very, very like, this very deepConfliction about this between

Mhmm.

Wanting people to know that they they can do
this if they want to.

Mhmm.

But it's also completely fine if they don't.
Yeah. And that that's valid too.And it's just It's tough, to
balance that and and not want toget also, you know, for me, I
mean, like, you know, I try toonly give advice about the areas

(51:02):
where I am sort of generallyhave an expertise in. Like Mhmm.
Customer research stuff, Ask meabout it. I will I will claim to
be an expert in that, but that'skinda the only area, really.

Yeah. You know,

a lot of other stuff is just my own personal
understanding and education andreading. And so

And but there is another Where

is that line?

Yeah. Where it is really hard, but there is
this other thing which is tobring awareness to something.
The receiver still needs to dothe work. They need to process
it. They need to decide if it'sright for them.
They need to decide if thetiming right, all those things.
But sometimes people just don'tknow. They just haven't thought

(51:44):
about it. So for example, onething that came up in the
Twitter threads quite a bit wasFolks said, well, I don't see
how you could do this. I don'tsee how you could have one
spouse building something on theside on top of a w two Unless
their spouse was a superhero anddoing 90 to a 100% of the

(52:05):
childcare and the housework.
And, you know, there are someold cultural ideas in there that
might need to be challenged. Andsometimes even just you might
have never even thought of it.Like, you may have grown up a
certain way where Your mom ordad, one of them went to work

(52:27):
and the other one stayed home.And it was like, that was just
how life was. But there's thisother consideration that Some
people just have never thoughtabout, which is, if you're
thinking about doing this and Ithink it did come up in our
first conversation because Thetitle of the episode is should
you start a startup with yourspouse?

(52:47):
The, the the other considerationis, okay, Frank, Eileen, whoever
you are that wants to do this,the other party in this is your
spouse. And, you may be bringingsome assumptions to the table
that you haven't even actuallythought of. Like, you you
haven't explicitly said, well,My spouse is gonna do 90% of the

(53:10):
childcare and the housework. Butthat's actually something you
you need to Explicitly bring upto your partner and say, hey,
this is what we're thinkingabout doing, or I'm thinking
about doing. And it could havethis benefit, But I guess we
should think you know, we haveto think through what what's
this going to mean for you?

(53:31):
And are you okay with that? AndWe have to be okay with the idea
that your partner might say,actually, I'm not okay with
that. I don't want that. I wantYou to be helping more with the
kids. I want you to be helpingmore with the chores, etcetera.
I

mean, I think that's kind of setting it up for
failure. Right? To say, alright.I'm gonna start a business, and
you're gonna do 90% of thehousework. Mhmm.
That, you know, may may maybethat That flu in, like, you
know, the 19 thirties, but

Mhmm.

And not anymore. And, you know, speaking to what
I have seen in people I know,Like, I know someone who who's
getting a company going, hasalready had a side project for a
long time, but is now going fulltime.

Mhmm.

They're supposed I I believe their spouse either
works very part time or stay athome. Mhmm. And they're like,
oh, yeah. And my wife is gonnabe doing, like, Customer support
on this too. Like and so it'snot just like it's like, you
know, doing it with your spouse.
Right? Like, there's a longtradition of mom and pop
businesses.

Mhmm.

Right? Right? And, I mean, you know, talking
to congress, like, I think partof this has been, hey. So mom
and pop software businesses,like, They exist. Like, it's not
just grocers and, you know,other things like that.
Right? Like, there are mom andpop software companies where,
you know, The wife is adeveloper and the husband's a
business person or vice versa orthey're both, you know, doing

(54:54):
things or, like, they've got,you know, like, they're, Like so
there that are realcollaborations.

Yeah.

That is definitely not for every couple.
Mhmm. For some people, you know,Could still be a family member
they're they're cofounding with,for some people, you know, what
other I'd say, definitely not.Right? It really comes down to
context and and but yeah.
I mean I mean, making thingsstated up front, I think, is

(55:20):
important and making sure thatyour Your goals align and your
expectations align. And then ifthey don't, having the kind of
relationship where you canContinually renegotiate those
kinds of things in a in in thesame way that you would in the
office And and and, b, just kindof sort of clear headed about

(55:41):
it, and and be willing to say,hey. Like, this actually isn't
working right now or, like, Youknow? Okay. Like, option a,
like, you're doing all thehousework.
Option b, like, oh, you'reactually using your accounting
degree, and then we hire a housekeeper. Like Mhmm. You know,
like right? Like, there's manydifferent options. But if you're
both aligned on it beingsomething you want to do

Mhmm.

Then I I I think that's kind of, you know I mean
I mean, if you're not alignedwith your spouse on anything,
you know, going on in yourhousehold, whether that's work
or parenting. Right? Like, thathas to be talked about. Like and
so the relationship has to beable to have those communication
channels already open anywaybefore you introduce a business,
which in many ways is likeanother child, into into the

(56:29):
picture. I like that.

I mean, I think that's a, Even what you just
mentioned, it's again, peopleneed tools that we're we're not
we don't come to anything reallyintuitively knowing any of these
things And the idea of okay.Like, let's try this, but let's
have a regular review meetingwhere we do sit down and say,
okay. How is this working foryou? Is this, you know, is this

(56:53):
okay, for you? And how's how youknow, I've had times where the
people in my family have come tome and said, dad, you when you
are on Twitter all the time, youare just More aggravated.
So let's have a review meetingon that because maybe, some of

(57:15):
your Twitter usage is is causingUse some distress, which then in
turn is affecting all of us. Solet's just have a review on
that, dad. You know? Like, maybewe can Scale that down or
whatever. And, yeah.
I think you're gonna need stufflike that in your Relationship

(57:35):
and your family.

And it's it's it's okay if people, you know,
don't wanna be cofounders withtheir spouse. Right? There's I
know plenty of people who haveGreat relation with their
spouses who could not run abusiness together. Mhmm. That
doesn't necessarily like, right,like, that that this is just a
very particular type, ofrelationship.
And and, I mean, that point of,you know, spouse, children,

(58:01):
Startup pick 2.

Mhmm.

That that's that's something I'm gonna be
thinking about too, because, Youknow, there were definitely a
lot of times when my husband andI were talking about geocodia at
the table, and we thought it wasa perfectly fun conversation.
But our daughter, when she was3, like, Probably did not think
it was so thrilling to talkabout, the multitude of issues
that come when you allow peopleto upload spreadsheets.

Yeah.

You know, like or, you know, like me, like, you
You know, I remember there wasone day, like, Sunday breakfast,
and I started, like, wireframingsomething on the like, and,
like, I was literally, like, hadprinter paper and was, like,
Taping it to, like, the livingroom wall, and we were, like,
having so much fun, like, whileeating bites of pancakes. And
it's like, maybe, like, shouldwe have been Engaging and having

(58:45):
a conversation with her aboutwhat was going on in her world.
Mhmm. Right? Like, that's alsothe kind of thing that I look
back on.
It's like, I didn't really thinkabout that much at the time, but
maybe maybe I should have.Right? And and I guess and also
in terms of life, it's like, youknow, Everyone is gonna have
regrets in life. Which regretsdo you want? It's not a matter

(59:05):
of not having regrets.
It's a matter of which ones andhow bad they are and whether you
can live with them and whetherthey are also things you can
recover from. Right? And I thinkthat's the beautiful thing About
a relationship that has a solidfoundation is that the
relationship can grow and it canevolve and it can be bended. And
Mhmm. And and I Like to believethat's, you know, with spouses

(59:29):
or with children or or anyoneelse.
Right?

Yeah.

And so it's never like you know, if you look
back and say, oh, I reallywasn't present, You know, during
the 1st 5 years, you can belike, well, great. Like, you can
fix that.

Yeah. What am I gonna do now?

Right. Exactly. You know, you always have that
opportunity to change. Totally.And that's that's that's
something I guess I I I findmyself Saying even when I don't
take my own, course of action,and I'm podcasting at 10 o'clock
on a Thursday night.

Justin Jackson (01:00:00):
Well, thank you so much, Michelle, for your
time. This is great. It's alwaysgreat to talk to you. Thanks for
all you're doing for with theSSP Alliance and folks can check
out geocodio online.Geocodio.com.
Right?

Michele Hansen (01:00:16):
Geocode.i0. I say geocod like the fish.i0.
Geocode.i0. We don't havegeocode.i0. We we didn't get
that.

Justin Jackson (01:00:23):
And, I'll also put links to Michelle's Twitter,
to the links, to everything elsegoing on. Check those out in the
show notes. Thanks again,Michelle.

Michele Hansen (01:00:33):
Thank you.

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Michele Hansen update: Section 174 and bootstrapping with kids

Episode Transcript

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.css-r6mb8g{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:1;overflow:hidden;}Cold Case Files: Miami

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Michele Hansen update: Section 174 and bootstrapping with kids

Cold Case Files: Miami